Standing Committee B

[Mr. Win Griffiths in the Chair]

Pensions Bill

Clause 172 - Annual reports to Secretary of State

Question proposed [this day], That the clause stand part of the Bill. 
 Question again proposed. 
 Question put and agreed to. 
 Clause 172 ordered to stand part of the Bill.

Clause 173 - Reference of reviewable matter to

George Osborne: I beg to move amendment No. 518, in
clause 173, page 110, line 34, at end insert 
 'taking into account but not being limited to remedies available by way of legal action in the civil courts'.
 I welcome you to the Chair, Mr. Griffiths. If I am a bit sluggish this afternoon, it is because I have been to the North West Fine Foods fair. I am not sure whether there are other north-western MPs in the Room—by the look of it, there are not—but we were all there enjoying the local produce at lunch. 
 Amendment No. 518 is small in terms of the number of words that it would insert in clause 173, but it is trying to open a much bigger issue. We could have tried to table amendments to the powers of the pensions ombudsman, but in an attempt to provoke the same debate we tabled amendments on the changes to the powers of the PPF ombudsman. The amendment would insert a provision that the ombudsman should take 
''into account but not''
 be 
''limited to remedies available by way of legal action in the civil courts.''
 We were talking this morning about the Swedish origins of ombudsmen, and why they were originally set up. Public sector ombudsmen—they are not called ombudspeople—almost by definition, deal with issues that are not capable of being remedied by legal action. That is something with which we constituency Members of Parliament are familiar, because we are asked, for example, to refer cases to the parliamentary ombudsman. The legislation that sets up public sector ombudsmen generally provides that they should not accept a complaint for investigation if it is about a matter for which a remedy is available by way of legal proceedings. 
 Generally, public sector ombudsmen have discretion to override that restriction if they think 
 the circumstances demand. We are familiar with that in our constituency surgeries. We have to be clear that people have exhausted the legal remedies, and are not at the same time pursuing a legal recourse, before we refer them to an ombudsman. Unless the discretion to override the restriction has been exercised, public sector ombudsmen confine themselves to cases in which the action that is complained of is not unlawful, but nevertheless allegedly causes injustice as a result of maladministration. 
 When ombudsmen were originally set up, or when the concept was introduced in this country, it was done in an attempt to give the citizen a fairly straightforward, simple means of attempting to redress a grievance without necessarily having to go to court or prove that something unlawful had happened. 
 The jurisdiction of the pensions ombudsman includes the power for him to investigate complaints of injustice caused by maladministration. However, unlike other public sector ombudsmen, far from discouraging his involvement with complaints that could be subject to legal proceedings, his jurisdiction expressly confers on him the ability to determine disputes of law and fact. His determinations are subject to a right of appeal to the High Court on a point of law. 
 We raised this issue because in a number of judgments in the High Court, judges have expressed unhappiness that the ombudsman is providing remedies although the Court thinks that no unlawful act has taken place. The view of the pensions ombudsman is that that is precisely what we as parliamentarians, and our predecessors, intended when we established ombudsmen to deal with disputes about the management or administration of pension schemes. However, the courts have started to kick up, and complain that the ombudsman is trespassing into their territory. 
 In addition to being unhappy if the pensions ombudsman comes up with a different remedy, and in different circumstances, to what the courts would provide, judges, in various judgments, have also stated that the amount of financial compensation that the pensions ombudsman has power to award to redress injustice caused by maladministration should be limited. Judges have suggested that such awards should be between £200 and £1,000. However, the pensions ombudsman, for one, considers that the amount of any award should reflect the injustice that has been caused and not be subject to an arbitrary limit imposed without statutory authorisation. 
 The Pension Schemes Act 1993, to which we shall be referring when we reach later amendments, provides that the pensions ombudsman may direct any person responsible for the management of the scheme to take such steps as he may specify. It might be thought that Parliament had clearly already spelt out in the Act and in the debates at the time that such a provision allows the ombudsman to provide the remedies, even if the courts, acting in accordance with precedents, do not, and to provide remedies for maladministration even if the action regarded as maladministration would not be regarded by the 
 courts as unlawful. At least one judge has commented that if Parliament had intended such a result, the legislation would have spelt that out more clearly, and that it would therefore be helpful if Parliament underlined the judge's view. 
 In other words, the legal profession seems to be questioning the role of the pensions ombudsman and his legal powers. Because we were discussing a new ombudsman—although this would be doubly relevant if that were to be the same person—I thought that it was worth having a debate, and making it clear that both sides of the Committee do want the ombudsman to have powers independent of the court, and to be able to investigate cases of maladministration even if nothing unlawful has happened, and to trespass somewhat into the area of the court's jurisdiction. If judges want us to spell that out for them, let us do that, so that there can be no dispute in court about the fact that we, as parliamentarians, intend to provide remedies for citizens through the ombudsman process. That is what my amendment would do. I do not pretend that it is perfect or that it would necessarily achieve what I hoped that it would, although it was drafted with the help of some advice from the industry. 
 I want us, as a Committee, to make it clear that we expect the ombudsman to provide an alternative route for people and to deal with maladministration. Moreover, there should not be arbitrary limits on the sort of remedy that he can provide. For example, they should not be limited to fines ranging from £200 to £1,000, as one judge recommended. We often find in Parliament that what we had hoped with good intentions to achieve is undermined or reinterpreted by the courts, which say that we did not spell out what we were trying to achieve clearly enough at the time. The point of the amendment is to make matters clear, and I shall be interested to hear the Minister's response to it.

Chris Pond: I received a letter on such matters from the Occupational Pensioners Alliance on 26 March 2004, as did the hon. Member for Tatton (Mr. Osborne), and he has read into the record many of the important points that it made. The alliance is arguing for a tidying-up exercise to ensure consistency in the way in which the ombudsman and the courts operate in such matters.
 Clause 173(5)(a) may allow regulations to be made enabling the pension protection fund ombudsman to direct the board to pay compensation in relation to a reviewable matter. Therefore, when, for example, PPF compensation has been underpaid, regulations may provide that the PPF ombudsman could direct the board to reimburse the amount underpaid, and may also include a requirement to pay interest. 
 Subsection (5), to which the amendment relates, refers back to the general regulation-making provision under clause 173(1), which requires regulations to make provision for the PPF ombudsman to refer a reviewable matter back to the PPF board with directions to carry out his decision. The amendment tabled by the hon. Member for Tatton would require 
 the PPF ombudsman to take into account remedies provided by legal action in the civil courts. 
 The intention, which seems straightforward and sensible, is that compensation payments would be in line with the remedies that could be achieved through the civil courts. Although I appreciate the intention behind that approach, matters that can be referred to the PPF ombudsman do not include private law disputes. The only role for the courts is in relation to judicial review or on appeal on a point of law from the PPF ombudsman. The intention is to ensure that there is an adequate statutory remedy for any infringement of rights. The regulation-making powers under clause 173 will provide the sort of remedies for which the Occupational Pensioners Alliance and the hon. Member for Tatton argue. With that reassurance, I hope that the hon. Gentleman will feel able to withdraw the amendment.

George Osborne: I accept that we are talking about the PPF ombudsman, but I was trying to create a slightly broader debate involving the pensions ombudsman. I wanted the Under-Secretary to spell out that the Committee, in approving the ombudsman, is making it clear to the courts that we see a distinct role for ombudsmen in such circumstances. We will talk about amendments relating to the powers of the pensions ombudsman later. We do not expect the courts continually to try to limit ombudsmen's powers or to complain that ombudsmen are straying on to their territory. The ombudsman service—whether we are talking about the pensions ombudsman, the PPF ombudsman or those with whom we deal, such as the parliamentary ombudsman—is very useful to members of the public who do not want to get heavily drawn into litigation. The intention of the amendment was to make that clear. If the Minister assures me about that, I will be happy to withdraw my amendment.

Chris Pond: I think that we are at one in what we are trying to achieve, and in what the proper role of an ombudsman, ombudsperson, or whatever we call them, should be. It is important that the PPF ombudsman can decide for himself or herself what remedy should be available to a complainant, and it is inappropriate for his or her judgment to be fettered in that respect. Although the mechanisms for providing a remedy will be set out in regulations—I hope that I can reassure the hon. Gentleman that they will provide the sort of protection for which he is looking—we do not have any plans to set limits on the amount of compensation that the PPF ombudsman can direct the PPF board to pay, because we think that that must be a matter of judgment for the ombudsman.

George Osborne: I am grateful for that further clarification, which put into even plainer English what I was hoping to achieve. With that reassurance from the Under-Secretary, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 173 ordered to stand part of the Bill.

Clause 174 - Investigation by PPF Ombudsman of complaints of maladministration

George Osborne: I beg to move amendment No. 537, in
clause 174, page 111, line 38, at end insert— 
 '( ) To assist him in an investigation, the PPF Ombudsman may obtain advice from any person who in his opinion is qualified to give it and may pay to any such person such fees or allowances as he may determine.'.
 I said earlier that I would talk about the Pension Schemes Act 1993. The amendment would give the PPF ombudsman the powers given to the pensions ombudsman in the 1993 legislation. It must be said that there is a striking difference between the Bill and previous legislation on the subject. To be honest, I stumbled across that only when I was preparing for the Committee. That striking difference is borne out by clause 174, which leaves the Government to determine by regulation an enormous range of investigatory powers that the PPF ombudsman should have. 
 If one reads the 1993 Act, as I am sure that members of the Committee did in preparation for these proceedings, one will have been struck, as I was, not having been a Member of this place at that time, that it spells out the powers of the ombudsman. It does not leave them to regulation, but sets out clearly what they will be. Amendment No. 537 replicates the powers that are spelt out in section 150(6) of that Act, which give the pensions ombudsman the power to 
''obtain advice from any person who in his opinion is qualified to give it and may pay to any such person such fees or allowances as he may with the approval of the Treasury determine.''
 I have attempted to insert similar wording in the Bill, because it is important to establish in the legislation what the powers of the new ombudsman will be. There is no good reason not to, since a previous Government and the officials who drafted the legislation 11 years ago—some of whom, probably, are working on this Bill—decided then to put into that Bill the powers of the pensions ombudsman. Now, when the new powers for the PPF ombudsman are being drafted they leave it all to regulation under clause 174. 
 The clause seems symptomatic of a growing desire to leave everything to regulation and statutory instrument, rather than spelling out in the legislation what are substantial powers. I know that at various stages of the passage of this legislation we have discussed clauses that give the pensions regulator various powers. However, we are talking about substantial powers to, in some cases, enter premises and, in this case, commission advice and pay for it out of taxpayers' money. It is sensible to make clear in the legislation what we are seeking to do. I cannot see how the Government could object to the amendment, since it merely replicates the powers that the pensions ombudsman has under the 1993 Act. However, no doubt the Minister will tell me why he cannot accept it.

Chris Pond: I am pleased that the hon. Gentleman is sitting down, because he is about to get another shock—something that will be unsettling. I accept the principle of the points that he made. The PPF
 ombudsman must have the information necessary to carry out his or her investigations.
 Section 150 of the 1993 Act, to which he referred, makes practical provision for the pensions ombudsman to obtain and pay for expert advice that would assist an investigation. The proposed amendment in relation to the PPF ombudsman is sensible but unnecessary. Clause 174(2)(h)(iii) provides that the PPF ombudsman may consider ''expert evidence'' when investigating maladministration cases. Subsection (2)(j) states that he may pay 
''the costs or expenses of prescribed persons''.
 Similar provisions in clause 173 apply when the ombudsman is investigating reviewable matters. The persons whose costs he may pay will include qualified persons who provide expert advice or who attend an oral hearing of the PPF ombudsman. For example, that may encompass actuaries, pension lawyers and insolvency experts. 
 The hon. Gentleman raised the important question why we have so many regulation-making powers in clauses 173 and 174. He made a cross-reference to the 1993 Act, in which rather more was included in the Bill than in regulation. I think that he would accept that we are talking about different roles and that clauses 173 and 174 set out the regulations—the detailed procedures—such as who can request a review by the PPF ombudsman, how such reviews are to be made and the time limits for doing so. We believe that it is sensible to allow the flexibility of making such provisions in the regulations, rather than putting them in the Bill, given that we are dealing with an ombudsman who will oversee the operation of a body that my hon. Friend the Minister described this morning as a unique institution, and that does not exist in any recognisable form at the moment. 
 Although I accept in principle many of the points that the hon. Gentleman has made, I ask him to withdraw the amendment, on the basis that it is not needed to achieve the objectives that he and I would like to see met.

George Osborne: I knew when I tabled the amendment that the Under-Secretary would accept it in principle, because it is about perfectly reasonable powers that I am sure will be made under the regulations. I was trying to highlight the fact that in 11 years there has been a change in the way in which legislation is brought forward.
 I do not accept the Under-Secretary's argument—I cannot believe that he really accepts it—that the PPF ombudsman would be a fundamentally different beast from the pensions ombudsman. When Parliament created the pensions ombudsman, that was a unique, first-time-ever role. Arguably, the pensions ombudsman faces a much broader range of issues and more complex issues, as he often deals with private sector pensions as well as public sector bodies. At least the PPF ombudsman is just dealing with one organisation: the PPF. 
 I do not accept the Under-Secretary's case that there is a fundamental difference between the two ombudsmen. In 1993, Parliament saw fit to put all these powers into a Bill. Now we find that Parliament 
 is giving the Government pretty general powers to regulate. That is a point often made in Standing Committees by Opposition spokesmen of whatever party is in opposition at the time. However, that distinction was a striking example. I have made my point, and I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 174 ordered to stand part of the Bill.

Clause 175 - Determinations of the PPF Ombudsman

George Osborne: I beg to move amendment No. 538, in
clause 175, page 111, line 44, at end insert— 
 '( ) The PPF Ombudsman may refer any question of law arising for determination in connection with a reviewable matter to the High Court or, in Scotland, to the Court of Session.'.
 I am in danger of sounding like a cracked record on this point. [Interruption.] Well, perhaps I will repeat the arguments that I have just made; they also apply to this amendment. I seek to write into the clause the same powers that were given to the pensions ombudsman under section 150(7) of the Pension Schemes Act 1993. My amendment would give the PPF ombudsman the power to 
''refer any question of law arising for determination in connection with a reviewable matter to the High Court or, in Scotland, to the Court of Session.''
 It seeks to put in the Bill powers that I am sure the Under-Secretary will say the PPF ombudsman will have anyway under the regulations. However, without repeating the arguments, I would like to hear what the Under-Secretary has to say.

Chris Pond: I warn you, Mr. Griffiths, that there is a real danger of fraternal co-operation and partnership breaking out in the Committee. Again, I am glad to see that the hon. Member for Tatton is sitting down because I think that he is right.
 As clause 175 stands, an individual unhappy with the determination of the PPF ombudsman may appeal on a point of law only to the High Court or the Court of Session in Scotland. The Opposition amendment would also allow the PPF ombudsman—himself or herself—to refer a complex point of law that needs to be resolved and on which he or she needs guidance from the High Court or Court of Session in Scotland. It would replicate the provisions in the Pension Schemes Act 1993, which states in section 150(7) that the pensions ombudsman may refer any question of law to the High Court or the Court of Session in Scotland. 
 For that reason, the amendment is correct in principle, and in principle we wish to accept the point made by the hon. Member for Tatton and that made by the organisations through him. A provision that allows the PPF ombudsman to refer matters to the courts where the question relates to a complex point of law is as appropriate for the PPF ombudsman as it is for the pension ombudsman. We want to look at the wording of such an amendment, and the legal 
 insulation of the clause, but I give the hon. Gentleman a commitment that, if he is prepared to withdraw his amendment, we will come back as soon as possible with a Government amendment to achieve the same effect. In other words, rather than always leaving it to individuals to decide whether a point of law should be referred to the High Court or Court of Session in Scotland, the PPF ombudsman should also have the power to refer questions of law to those courts. I ask the hon. Gentleman to withdraw his amendment on the understanding that we will introduce our own to the same effect.

George Osborne: In my limited experience of Standing Committees during my three years here, it has once or twice happened to me that the Government have said, ''We are going to accept your amendment.'' However, just as I think that I am about to change the law of the land, the Government snatch victory away and say, ''But, of course, we are not sure that the amendment is properly worded, and we will have to go away and make sure that it is absolutely correct''—even though all I have done is replicate something from an Act of Parliament. I will, of course, accept my victory in principle.

Chris Pond: Perhaps this will make the hon. Gentleman feel better: if we find that his wording is absolutely right, we will use his wording and it will become known as the Tatton amendment.

George Osborne: My constituency is famous for many things, and I have been doing all I can to find other things that it can be famous for. I concede that this will be a small step in that direction. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 175 ordered to stand part of the Bill.

Clause 176 - Obstruction etc of the PPF Ombudsman

Question proposed, That the clause stand part of the Bill.

Nigel Waterson: Welcome back to our deliberations, Mr. Griffiths. I have a couple of queries about the clause. In amendments debated this morning we tried to set out some powers that the PPF ombudsman, who may be the pensions ombudsman, would have to investigate matters, take evidence, call witnesses and so on. It is clear from earlier clauses that there will be a series of regulations in due course that will set out the way the ombudsman will conduct his business.
 I was therefore puzzled by clause 176. On a logical reading of the Bill, one would think that the matters in this clause would be set out in regulation. As far as my research has taken me, there does not seem to be anything in the Pensions Act 1995 that replicates this provision. We agree as a matter of principle that there should be penalties that can be imposed on anyone who seeks to obstruct the PPF ombudsman, but it would make more sense to make that part of a general code as to how the ombudsman can conduct investigations and determinations under his or her remit. 
 I have a query that Scottish Members might be able to help me with. Subsection (4) seems to suggest that there is no such offence as contempt of court in Scotland. That might say a great deal about the rough and tumble of Scottish legal proceedings—or the opposite. It would be interesting to know why there is that slightly bizarre distinction.

Chris Pond: We do not expect this provision to be used frequently—certainly not on a daily basis. We expect the PPF ombudsman to reach determinations based on the evidence before him. We do not anticipate that anyone would deliberately obstruct him in carrying out his functions in Scotland or anywhere else. However, in the unlikely event that the PPF ombudsman is unlawfully obstructed, this clause allows him or her to certify the offence in question to the county court, or sheriff in Scotland. The court will, if required, order a punishment as though the person were in contempt of court.
 Similar provision is made for the pensions ombudsman under section 140 of the Pension Schemes Act 1993. The hon. Member for Eastbourne (Mr. Waterson) said he could find no reference to a similar provision in the Pensions Act 1995; that is because it was in the Pension Schemes Act 1993. The power has never been used, although advising people that it will be used has proved a useful deterrent. We envisage that the power will be used rarely if at all, but we need to ensure that the PPF ombudsman has sufficient powers to carry out his functions effectively. 
 Question put and agreed to. 
 Clause 176 ordered to stand part of the Bill.

Clause 177 - Backdating the winding up of eligible schemes

Chris Pond: I beg to move amendment No. 501, in
clause 177, page 112, line 41, at end insert— 
 '(1A) Subsection (2) also applies where— 
 (a) the trustees or managers of an eligible scheme— 
 (i) make an application to the Board under subsection (1) of section 101, or 
 (ii) receive a notice from the Board under subsection (5)(a) of that section, and 
 (b) the winding up of the scheme begins— 
 (i) at or after the time the application is made or notice is received, but 
 (ii) not later than the issuing of a notice in relation to the scheme under section 102(2) or (3).'.

Win Griffiths: With this it will be convenient to discuss Government amendments Nos. 502 and 503.

Chris Pond: These are minor drafting amendments to clause 177. They ensure that it applies to schemes for which an application or notification has been made to the PPF under clause 101. This would apply to schemes where there is no insolvency event under clause 95—for example, some public sector schemes without a Crown guarantee, or schemes with a foreign sponsoring employer.
 Clause 177 provides for the backdating of the winding up of eligible schemes in certain 
 circumstances. The clause applies where a qualifying insolvency event under clause 95 has occurred in relation to the sponsoring employer of an eligible scheme or an application or notification has been made in respect of an eligible scheme under clause 101 and the scheme is thus subject to a PPF assessment period. The power is designed to apply in a few specific circumstances. 
 As provided for in subsection (2)(a), the clause applies where the regulator makes an order under section 11(3)(a) of the Pensions Act 1995 directing the winding up of the scheme during the assessment period. Although clause 107 prevents scheme wind-up during the assessment period, it does not prevent the pensions regulator from making an order directing the wind-up of the scheme. That is because there are circumstances where it would be in the interests of both the PPF and scheme members to wind up a scheme during the assessment period. Winding up the scheme may enable the debt owed by the employer to be recovered earlier by the PPF in its capacity as creditor of the debt. Should the PPF then cease to be involved with such a scheme, the winding up of the scheme is backdated to the date of the qualifying insolvency event. That ensures that the priority order on winding up applies from the beginning of the assessment period. 
 Subsection (2)(b) is designed to deal with cases in which a qualifying insolvency event has occurred in relation to the employer but the board refuses to take over a scheme as a result of the moral hazard provisions in clauses 115 and 116. Such schemes were not eligible for PPF compensation and thus should not have come into the assessment period in the first place. The effect of a scheme coming into an assessment period was to prevent it from starting to wind up, when it otherwise would have done so. The clause provides that if a scheme winds up after the PPF has ceased to be involved with it, the trustees can backdate the winding up to the date of the qualifying insolvency event. 
 Clause 177 does not cover schemes required, under clause 119, to wind up because their assets are sufficient to buy out the protected liabilities—broadly speaking, the PPF level of benefits—because similar provision to backdate wind-up is made in clause 177(6). I hope that hon. Members find that elucidation helpful; I know that they have been following every word. I commend the amendments to the Committee. 
 Amendment agreed to. 
 Amendments made: No. 502, in 
clause 177, page 113, line 2, leave out 'that qualifying insolvency event' and insert 
 'the event within subsection (1)(a) or, as the case may be, (2)(a)'.
 No. 503, in 
clause 177, page 113, line 8, at end insert— 
 '( ) Subsection (4) of section 100 applies for the purposes of subsection (1A) of this section as it applies for the purposes of subsection (1) of that section.'.—[Mr. Pond.]
 Question proposed, That the clause, as amended, stand part of the Bill.

Nigel Waterson: I cannot possibly fault the Under-Secretary's erudition on the amendments; that is why I did not speak on them. However, I have a query on the scheme mentioned in clause 177. Will the business of backdating the winding up of eligible schemes contribute in any way to the pressures on the PPF in its early stages? We heard anecdotal evidence in earlier debates about any number of schemes that are staggering on, waiting to fall into the welcoming arms of the PPF when it starts operating. Does the Minister think that the provisions will increase the pressures, or will they make a difference in only a tiny proportion of cases, and, in a relatively short time, in respect of only a few schemes? I am sure that the Department will have made projections. Or are the provisions a loophole that people who are waiting and hoping to take advantage of the PPF can operate to their advantage?

Chris Pond: We are carefully attuned to possible loopholes, so I can give the hon. Gentleman a reassurance that that is not the case. The power is designed to apply in a very few specific circumstances, which I outlined when speaking to the amendments. Schemes will not be able to come under the PPF unless the insolvency event happens after A-day and winding up occurs after A-day. I hope that that gives the hon. Gentleman the reassurance that he requires.
 Question put and agreed to. 
 Clause 177, as amended, ordered to stand part of the Bill.

Clause 224 - Dissolution of OPRA

Amendment made: No. 504, in 
clause 224, page 150, line 21, leave out 
 'an order under this section' 
 and insert 'subsection (2)'.—[Mr. Pond.]
 Question proposed, That the clause, as amended, stand part of the Bill.

Chris Pond: I ask the Committee to cast its mind back to the halcyon days of the Committee—to 9 March, when we debated clause 7, which provided for the transfer of the Occupational Pensions Regulatory Authority's functions to the regulator, and made corresponding changes to definitions in previous Acts.
 Clause 224 makes specific provision for the dissolution of OPRA and includes a power to ensure smooth transition from the current authority to the new regulator. An order under the clause will transfer all property, rights and liabilities to either the pensions regulator or the Secretary of State, as appropriate. Pensions tracing—putting people in touch with pension schemes with which they have lost contact—is currently performed by OPRA, but it will not be a function of the pensions regulator, hence the need to include the Secretary of State in the provision as well as the pensions regulator. 
 The clause will also ensure that there is continuity of regulation by allowing, among other things, cases that were under investigation by OPRA to transfer to the new regulator. We have made specific provision in 
 clause 224(3) for the transfer of information from OPRA to the new regulator, which will ensure that any information transferred is subject to the safeguards considered by the Committee on 11 and 16 March. 
 Amendment No. 504 is a technical amendment to the provision, which has corrected a typographical error.

Steve Webb: I apologise to the Under-Secretary for missing his introductory remarks, but my question relates to what he just said. He referred to pensions tracing, which is important because people lose touch with their pensions and pension funds lose touch with their pensioners. Given that the national insurance system seems to lose touch with everybody, this is an important matter. Pensions tracing is done by OPRA, but the Minister implied that when there is no OPRA the regulator will not do it, for reasons that he did not specify. It has been decided that the Secretary of State will do it.
 I should like to know how big a problem this is, and how much of what OPRA currently does is concerned with pensions tracing. How big a problem is there with people losing track of their pensions, and to what extent is the problem that schemes lose track of their members? Is that anything to do with what we are talking about? Are we talking about individuals? What is the scale of the problem of lost pensioners and lost pensions? When the Secretary of State is involved in pensions tracing, will I phone Newcastle if I have lost my pension? Who is the Secretary of State, as we so often say?

Chris Pond: The pension-tracing work of OPRA is a specific part of its function. The hon. Gentleman was close to the truth in asking whether he should phone Newcastle, because that is where the pension-tracing functions are currently carried out. We have a complement of 70 staff doing that work in Newcastle, compared with 240-odd staff based in Brighton undertaking OPRA's other functions. That is an important function in OPRA's current work, and one to which we wish to continue to give priority.
 However, in the establishment of the new pensions regulator, which, as we have discussed at some length, will be a very different sort of regulator, that part of OPRA's current functions fits more sensibly within the structure of the Department for Work and Pensions. Although no decisions have been made on the location of the staff who are currently working on pensions tracing, the hon. Gentleman's suggestion that he should phone Newcastle is still a pretty good bet. We can provide further information on that subject to the Committee, if it would be helpful. 
 Question put and agreed to. 
 Clause 224, as amended, ordered to stand part of the Bill.

Clause 225 - Transfer of employees from OPRA to the Regulator

Question proposed, That the clause stand part of the Bill.

Nigel Waterson: I have just one point, which is something of a reprise of a much earlier discussion about the effects of the Transfer of Undertakings (Protection of Employment) Regulations 1981. I remind Committee members about the crucial role that Eastbourne played in TUPE's history, in connection with the Eastbourne dustmen. Leaving that aside for the moment, we had great debates when discussing the regulator, although that seems a long time ago now. We heard that the new body would be a new kind of regulator; that it would be focused, have a light touch with schemes where there were no great worries, and be much more intrusive where there were real concerns about how schemes were being operated.
 Although we must recognise that TUPE exists, is this not a temptation to move the entire staff of OPRA to the regulator, bag and baggage? How will the regulator ensure that a group of people with the best possible intentions, who have been seen to be too keen on box ticking, but not keen enough to reach the heart of the problems with pension schemes, will be re-educated to carry out the new task? Will they be marched off into the jungle to be re-educated, or will hard decisions be made about how some of them will not make the grade, and so will not be TUPE'd across? I should not like to see the tail wagging the dog because of the Government's obeisance to trade unions and labour law, as opposed to setting up the regulator in accordance with the Government's own wishes. They want a 21st century regulator to deal with the problems of pension schemes in the 21st century.

Steve Webb: I wish to make one simple point. The transfer of employees from the Occupational Pensions Regulatory Authority to the regulator prompts the question, to where will they be transferred? An advertisement has been placed for the new pension protection fund to be based in the south of England. Given the Government's drive to move everything out of expensive London office accommodation into cheaper parts of the country, especially high unemployment areas, can the Under-Secretary of State say to where those employees who are based predominantly in Brighton and those who are employed in Newcastle will transfer? Has the Chancellor's drive to move people out of south-east England been successful? Has it reached the Department for Work and Pensions or, at just the point at which a new organisation is being set up, is the Department reverting to the old ways?

Chris Pond: We discussed such matters at some length earlier in our proceedings. However, hon. Members are right to raise them again in the context of clause 225, which is specific about ensuring that the terms and conditions of employment of staff transferring from OPRA to the regulator will be protected. I am sure that all members of the Committee want to make sure that those conditions are protected. In our earlier discussions, hon. Members wanted to make it clear that they had nothing but admiration for the work of OPRA, although there is recognition that the tick-box approach, as the hon. Member for Eastbourne described it, is not the most effective way forward.
 That is why we are devising the new form of regulator. I say to the hon. Gentleman that many of the proposals for the changes that are necessary have come from other reviews into the way in which OPRA was fulfilling its function, but many of the ideas for the new regulator came from OPRA itself. It is not a matter of transferring across the same cultures and the same approach. Many of the people who will transfer across with their expertise will carry with them an enthusiasm for the new approach.
 Tony Hobman, the new chief executive, has now been appointed. Members of the Committee should have received a letter to that effect before Easter. He has already made it clear that there will be new culture requirements. In many cases, those who are not happy to accept the new approach have already left and no doubt others will, too. It is important that we recognise that OPRA undertook a good job within the constraints imposed on it by law, but that there is also an understanding within the organisation—as within the Committee—that a new approach is needed. 
 In response to the hon. Member for Northavon, I can confirm that the new regulator will be based in Brighton as OPRA is based at present. I am not sure whether that is the first time that statement has been placed on the record. If so, I am pleased to have told the Committee. 
 Question put and agreed to. 
 Clause 225 ordered to stand part of the Bill.

Clause 226 - Dissolution of the Pensions Compensation Board

Amendment made: No. 505, in 
clause 226, page 151, line 1, leave out 
 'an order under this section' 
 and insert 'subsection (2)'.—[Mr. Pond.]
 Clause 226, as amended, ordered to stand part of the Bill.

Clause 227

Service of notifications and other documents 
 Question proposed, That the clause stand part of the Bill.

Chris Pond: Clause 227 is the first of three clauses dealing with the service of notification and electronic working. It makes general provision for any notification or sending of documents authorised or required by the Bill. It might be helpful to make some general observations about those clauses.
 As hon. Members are aware, it is the Government's policy to make our services available online by 2005, and to allow people to communicate with public bodies electronically if they wish. Hon. Members also know that we have no intention of compelling anyone to accept or send an e-mail or any other form of electronic communication. I know that certain groups have been concerned about that for reasons of their own faith. These clauses follow equivalent provisions dealing with notification and electronic communication elsewhere in primary legislation—for 
 example, in the current Energy Bill. This Bill ensures a consistent approach across the statute book. 
 I thought that it was worth making those few comments. I was tempted to send Committee members an e-mail to that effect, but decided it was more appropriate to tell them verbally.

Nigel Waterson: I am grateful to the Minister for his explanation of these new-fangled methods. If some of his briefing notes were intended to get to people like me in time, e-mail is a good way of doing that. I would like to propose that idea, even at this late stage, and toss it over to the Government side. Even us fuddy-duddy old Tories use e-mail.

David Cairns: Eric Forth doesn't.

Nigel Waterson: Perhaps not, but I find it remarkably reliable on the whole, even if I spend hours printing stuff off.
 Question put and agreed to. 
 Clause 227 ordered to stand part of the Bill.

Clause 228 - Notification and documents in electronic form

Chris Pond: I beg to move amendment No. 558, in
clause 228, page 153, line 17, at end insert 
 'and in the application of this section to Northern Ireland by virtue of section 246(2)(f)(ii) also includes the Department for Social Development in Northern Ireland'.
 The amendment expands the definition of ''relevant authority'' in so far as this clause extends to Northern Ireland. The current definition of relevant authority comprises the board, the pensions regulator and the Secretary of State. The amendment provides that the Department for Social Development in Northern Ireland, which is responsible for pensions matters in Northern Ireland, will also be a relevant authority. This means that the provisions of this clause will apply to Northern Ireland and in like manner to other relevant authorities. 
 Amendment agreed to. 
 Clause 228, as amended, ordered to stand part of the Bill.

Clause 229 - Timing and location of things done electronically

Question proposed, That the clause stand part of the Bill.

Nigel Waterson: I would like to make just a brief point about subsection (4) and the question of presumptions of notification being made within a certain time. When I was a young lawyer—

George Osborne: Many years ago.

Nigel Waterson: As my hon. Friend reminds me, many years ago.

David Cairns: There was no e-mail then.

Nigel Waterson: There was something called Telex, which was fascinating. That was about it; there were not even fax machines, which was something of a blessing, although that does not seem to have hampered the workings of the Minister's private office in terms of the explanatory notes. There was a presumption in those days—there may still be now for all I know—that if a person posted a document to somebody in the UK with a first-class stamp it would arrive the next day. The court could work on that as a presumption on the question of giving due service of a legal document. That may still be the case although, sadly, first-class mail is infinitely less reliable than it was all those years ago. The regulator and the Post Office continually argue the toss about how badly they missed the targets, but I forget the percentages for that.
 The Under-Secretary is clearly excited about the electronic age, but I want to press him a little more on some of the presumptions that have been made. Some of them can be quite dangerous. E-mails can vanish into the ether and then pop up days later for no explicable reason—and some of them never get sent at all, of course. There are real problems with electronic communication; in its way it is every bit as complex as the old-fashioned method. 
 I urge caution with regard to presumptions. What safeguards does the Department have in mind? Has there been any serious attempt to consult with the various professional bodies, such as the Law Society, about how valid these presumptions are? There must be a great raft of relevant experience and procedures—in the High Court for example—about electronic communication. I am not entirely up to speed on that, as might be expected, but we must be cautious; when people are being given notice of something serious and important, assuming that they will get the communication within a certain time scale may not reflect the reality of the situation.

Chris Pond: The hon. Gentleman raises an important point. Clause 229 allows for provisions to be made for proving in legal proceedings that an electronic communication satisfies the requirements of an enactment under this Bill in respect of timing and location.
 It is important that people receive information in such a way that they feel it can be relied upon; they must also be sure that they will get it in an appropriate time scale and that it can be guaranteed in some way. It is partly for that reason that we are also making provision that some of this information can be transferred electronically, as opposed to by what some in the industry now describe as ''snail mail.'' 
 The hon. Gentleman was right to ask whether there will be consultation on the presumptions that are included in the order, and I can assure him that there will be. 
 Question put and agreed to. 
 Clause 229 ordered to stand part of the Bill.

Clause 230 - Overriding requirements

Malcolm Wicks: I beg to move amendment No. 559, in
clause 230, page 154, line 13, leave out 'section 204' and insert 
 'sections [no indemnification for fines or civil penalties] and 204'.

Win Griffiths: With this it will be convenient to consider the following:
 Government amendments Nos. 567, 568 and 570. 
 Government new clause 32—No indemnification for fines or civil penalties.

Malcolm Wicks: Welcome back to the Committee, Mr. Griffiths. As a courtesy to the Committee, before I speak to these amendments I want to say that we have agreed through the usual channels to conclude our debate this afternoon after discussion of this clause. That is because the Government recognise that the new clauses dealing with the requirement to consult will be the cause of considerable debate but as they were tabled only on Friday the Opposition's amendments are starred on this morning's amendment paper. In the interests of thorough scrutiny and proper courtesy we are content to ensure that there is thorough discussion on these important clauses, and we look forward to that occurring on Thursday.
 New clause 32 replaces section 31 of the Pensions Act 1995, which provides that when a trustee of a trust scheme is liable to pay a fine, either following conviction for an offence or from a penalty imposed by the regulator, the assets of the scheme may not be used to indemnify the trustee. Section 31 also provides that if any trustee has been reimbursed in this way they may be guilty of an offence if they are aware or have reasonable grounds to believe that that has happened. The provisions extend to reimbursements for premiums for insurance against such fines being imposed. Section 31 ensures that trustees are personally responsible for any final penalty for which they are liable. Those measures are entirely right and sensible. The new clause has the effect of extending those provisions so that they would cover not only trustees of trust schemes, but also managers of personal pension schemes. 
 I believe that it is right that members of personal pension schemes should receive the same amount of protection as members of occupational schemes, whenever that is appropriate. The new clause would ensure that managers of personal pension schemes, like trustees of trust schemes, would be personally responsible for their actions, and that any fine imposed on them as a result of their actions could not be passed on to scheme members. 
 The four amendments that travel with the new clause are technical in nature and would ensure consistency throughout the legislation. Amendment No. 570 would repeal section 31 of the 1995 Act; amendments Nos. 567 and 568 would remove references to section 31 that become unnecessary as a 
 consequence of the repeal; amendment No. 559 would ensure that the new clause would override any scheme rules that may otherwise seek to enable trustees to be indemnified.

Nigel Waterson: I am grateful to the Minister for that explanation, which seems to make eminent sense. Before I come to the detail, I should like to thank the Minister for his indulgence. We were somewhat wrongfooted by these late new clauses, although I am sure that that was nobody's intention. We have now tabled amendments, but they are starred amendments.
 It is only fair to be totally balanced about this; it is only fair on the officials that they should have a chance to brief Ministers on our amendments. It is unfortunate, but we will probably make more progress in the long run if we call a halt now and start afresh on Thursday. As the lawyers would say, that is entirely without prejudice to any new amendments or new clauses that may surface between now and then, with or without explanatory notes. By the way, my e-mail address is watersonn@parliament.uk. 
 We can see the wisdom of new clause 32; it largely replicates something in earlier legislation, as the Minister said. Of course it is right that the assets of a scheme should not in any way respond to fines of civil penalties personal to the trustees or the managers of a scheme. However, that raises an echo of an issue that we dealt with some time ago in our amendments: the question of indemnifying trustees and managers in situations in which they have quite properly incurred liabilities. 
 I am slightly undecided as to where we left that debate; I suspect that we withdrew our amendments and that nothing much else happened. However, perhaps the Minister said that he would come back to the Committee on the issue. When a scheme is in effect taken over by the PPF, we think it appropriate that there should be proper measures in place to ensure that legitimate liabilities incurred by trustees and managers, which are not properly ongoing liabilities, should be covered in some way by a full indemnity. I am sure that we tabled some such amendments and that there was a debate about the matter; however, beyond that my memory fails me.

Malcolm Wicks: Let me too refresh my memory on that more general point about indemnity. I thank the hon. Gentleman for his support for this measure. If people are to be penalised financially as a result of their conduct, it would be absurd if the scheme rather than the individual ended up writing the cheque. I thank the hon. Gentleman for his support.
 Amendment agreed to. 
 Clause 230, as amended, ordered to stand part of the Bill. 
 Further consideration adjourned.—[Margaret Moran.] 
 Adjourned accordingly at twenty-six minutes to Four o'clock till Thursday 22 April at half-past Nine o'clock.